This May Be The Most Important Jobs Report Of The Election — Here's The Fascinating Way It Could Create A Market Surge

Fascinating (and perhaps too clever) note from Citi's FX guru Steven Englander commenting on tomorrow's big Non-Farm Payrolls report. He has a very surprising argument for what would be the best outcome for markets.

Tomorrow’s payrolls may be the most important economic release until the election. It seems very possible to us that the focus will be on the Unemployment Rate because of its political importance, rather than NFP, despite its economic importance. Many analysts feel that a Republican Presidential victory will be better for the asset markets, at least in the short term. There is some room for debate on this, but it is probably the consensus working assumption.

Our conclusion is that the UR may be a more important driver of FX market reactions on Friday than payrolls, and that the most risk positive/USD negative outcome is a run-up in the unemployment rate, accompanied by a strong payrolls print, essentially the opposite of last month’s release.

There is one more release on Nov 2, but tomorrow’s may set the tone of the next month of campaigning and be the more important.

So in other words, the most "risk-on" outcome would be, says Englander:

Payrolls above 150k and the Unemployment Rate rising.

That would mean the economy is getting better AND Obama would suffer a major blow.

And conversely, if payrolls were weak (a bad economic sign) but the unemployment rate fell, that would be the absolute worst for the markets.